The Permian needs more gas gathering and processing capacity pronto to support the expansion of crude-oil-focused drilling, and one of the Permian’s last privately held midstream companies is stepping up in a big way with the buildout of an entirely new — and very expandable — network in the Midland Basin. In today’s RBN blog, we discuss the impending startup of a new Brazos Midstream processing plant in Martin County, its plans for another Midland-area plant and the company’s already expansive midstream holdings in the Delaware Basin. As you’ll see, Brazos’s strategy echoes that of a well-known predecessor.
The new gas-related infrastructure the Permian needs to support continued growth in crude oil production has been the topic of several blogs the past few months — among them, OMG, All My Rowdy Friends Have Settled Down and, most recently, Up Around the Bend. Each hammered home the same theme, namely that Permian oil production can only grow as quickly as the ability of gas gathering systems, gas processing plants and takeaway pipelines to handle the vast volumes of associated gas that emerge from West Texas and southeastern New Mexico wells with the shale play’s “black gold.”
By our count, some 3,300 MMcf/d — 3.3 Bcf/d! — of new gas processing capacity is slated to come online in the Permian between now and mid-2026, and plans for at least a few more processing plants beyond that are in the works but not yet announced. Just as important, the 2.5-Bcf/d Matterhorn Express Pipeline from the Waha Hub to the Katy, TX, area is expected to come online as soon as September and several other gas takeaway projects are on the horizon, including the 2.5-Bcf/d Blackcomb Pipeline (see Southern Cross) from Waha to South Texas (scheduled to start up in the second half of 2026) and, very likely, the 2-Bcf/d Warrior Pipeline from Waha to East Texas (expected to reach a final investment decision, or FID, this fall). Other takeaway projects are possible too.
All this gas-related midstream investment reflects the confidence among producers, shippers and others that Permian drilling-and-completion activity will continue increasing from its current record-setting pace — about 6.2 MMb/d of crude oil and 18.6 Bcf/d of gas, according to RBN’s weekly Crude Oil Permian and NATGAS Permian reports.
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